I went through what you said doing a repair selecting install as administrator with the same results.
Last night I uninstalled as clean as possible then selected install as administrator resulting in the same problem.
In Capture Audio from Sound Card I noted trying different things everything reverts back to default after clicking OK
The same message is given as before "There is not enough free space on the selected destination to continue."
I disabled all the Internet Security features and disconnected from the Internet for safety during the install. I did briefly reconnect for an update request.
All the installs have went without any hitches and I'm really puzzled.
I've use Roxio for for longer than I can remember and have never had this problem before. Recording streaming from different sources is one of the best and versatile features of Roxio.
Using win7 pro 6gb mem, 2.8g i7, 2tb raid0 drive, ATI Radeon HD 4800 Series Graphics, & all the drivers are up to date